Home Cover Betting, a new investment hub

Betting, a new investment hub

by Bidemi Bakare
0 comment

How betting redefined investment drive, advertising in Nigeria

Lottery and betting are two major gambling games legalised all across the world including Nigeria. While in the past, lottery business in Nigeria have had more prominence, however all that may have changed in recent times as sport betting appears to have taken over the scene with the attendant upsurge in advertising spend causing stakeholders to wonder if betting is not the new investment hub in the country, KOLA BOLA and BIDEMI BAKARE report.

Understanding the basics

In Nigeria, gambling is legalized by the enactment of the National Lottery Act 2005.The law splits the games into two categories. The legal games which include lottery, land-based casino, and sports betting and the illegal games comprising roulette, dice games, and non-skilled card games.

However, over the years, sport betting and lottery seem to be more popular among the people with a greater number yet to realize the importance of the two games to the social economic life of the people.

But to the Managing Director, Grand Lotto, Niyi Adekunle, people need to understand the concepts of sport betting and lottery to be able to appreciate why they ought to embrace these games.

He said: “For lotto and sport betting, there is no major difference apart from semantics and a bit of architectural design because the two are games and games are for entertainment

“Lotto deals purely with numbers and as such it is called number games. There are different varieties of lotto including the one known as 5 of 90 which is very popular across the West Coast of Africa. They understand it very well and play it. There are 90 numbers in 5 of 90. The first five that come out are called winning numbers and the last five too are now being used as winning numbers

“So generally, lottery is actually designed to get people entertained and to keep them busy because the truth of the matter is that the people that engage in lottery are not found around criminality and crime. This is because the game increases hope and makes you feel like you can always have something extra coming from other sources and because it pumps your blood and increases your adrenalin it makes you hopeful and happy. It engages you and create this kind of feeling that relaxes you at the end of the day. “On the other hand, sport betting deals with game fixtures. You hear Chelsea versus Mancity playing finals of Champions league. People will go to bet stand or on their mobile phone and say Chelsea looks stronger.

“So, you will see people play with what is called 1.5 odd. The 1.5 odd simply means that if you are playing with 1000 naira what you get is 1,500 naira when you win. So, what it means is that you are getting 500 naira extra on your 1000. “No doubt this not only creates emotional connection with the club but also provide an opportunity to give better lives to the people through their winnings.”

Betting and rising ad spend

In the past, sponsorship of most live events had been the exclusive preserve of telecommunications and brewery companies but not anymore as sport betting companies are now holding the ace. From league matches across the world to reality shows and to cultural events, the story is the same for sponsorship by sport betting companies which are now taking the lead in terms of advertising spend.

Although there is no actual figures available on the advertising spend by these betting companies, the fact on ground is enough to show that it is one of the biggest in recent times.

That’s aside the huge amount spent daily by people who are directly involved in the betting games. A recent report indicates that about 60 million Nigerians between the ages of 18 and 43 spend almost N2 billion daily on sport betting translating to N730 billion annually.

Such figures are indeed very significant when contrasted with the country’s annual budget of nearly over N11trillion.

Commenting on this development, Adekunle noted that sport betting has been able to witness a staggering ad spend thanks to the growing popularity of sports especially football among Nigerians.

“Sport betting is more prominent now courting more ad spend because of the passion of the people for sports especially football. This game runs purely on technology and there is a lot of dynamism brought into it that makes it very attractive to the millennials. Actually, the millennials are driving it as against what the people think that because they don’t have jobs that’s why they are doing it. The truth is, the unemployment rate as at today in places like Singapore and Hongkong is very low. And the figures they are churning out regarding lottery is however very impressive. Nigeria is nowhere close and so I don’t agree when people say it is because Nigerians are not having jobs here that’s why they are playing lottery.

He said despite the growing popularity and increasing adspend in sport betting in the country, Nigeria nonetheless still has a long way to go to become one of the biggest sport betting countries in the world.

“ In sport betting, I must say that we are not there yet as we are not even in the first ten. We are just trying to sprout in Nigeria as we are just scratching the surface. As at 2017, the report from London alone indicates they have up to 52 companies operating within that space. Also, in Sweden which is a very small country when compared to Nigeria there are up to 80 betting companies operating within that space. But as big as Lagos seems to be there are only 37 registered sport betting companies and eight registered lotto companies. Out of the 37 of the sport betting companies in Lagos, you barely have 12 that are actually working as the others are either yet to find a good technical platform that can actually support their business or they don’t even have money to push it or they have launched and nobody is looking at their side and they are dropping their certificate of operation, he said”

Entry point for online sports betting

Just like any other business, certain financial requirements must be met before a gaming operator can be allowed to operate an online sport betting.

In Lagos for instance, The Lagos State Lotteries Board (LSLB) expects an operator to obtain a license at the payment of certain fees regardless of any license already obtained from any other national agency.

An application fee of N500,000 together with an initial license fee of N50 million and annual renewal license fee of N10 million are part of stipulated fees that an operator is billed to pay to ensure a smooth take off of business operation in the state.

In addition, any prospective operator is expected to have a minimum share capital of twenty million naira as the minimum value of shares at the time of registration which shareholders are not required to make financial contributions to.

And for foreign owned companies, there is a local content requirement that does not permit 100 percent foreign ownership as Nigerians are required to hold at least 15% of shares in such companies.

Upon the payment of the application fee and subsequent submission of form, the Lagos State Lotteries Board conducts due diligence on the application which will take a minimum of 15 working days after which the applicant is invited to make a presentation before the LSLB, to justify the grant of the license.

And following the satisfactory fulfilment of the pre-approval requirements and the payment of the license fee of N50 million, an Approval-In-Principle (AIP) is then issued, which is a temporary license granted for a period of 90 days after which a final license is issued upon the fulfilment of all the conditions stated in the AIP.

But beyond the issue of funding for take-off of operation, sport betting as a well-regulated sector is not treated with kid gloves as efforts are made by government to prevent its use as a tool for money laundering.

According to Adekunle, government’s agencies such as the Economic and Financial Crime Commission (EFCC) are brought in to help check any foul play by operators.

“To operate a lottery or sport betting platform EFCC is involved as one has to get his certificate or license endorsed by the EFCC. You also need to send out reports every month of monies that flow into your account including monies sent in bulk.

Even the states now have regulatory departments which look over lotteries and sport betting just to be sure nobody is perpetrating evil in the space. So, generally you will have to be above board to run perfectly the gaming space. In all, you will have to pay money to the government, go through training and be certified before you can open the business, he said”.

Attraction by foreign sport betting companies

Considering the sheer size of the country’s population and indeed market, the sport betting industry has continued to witness the incursion of foreign companies into the business in Nigeria, a development, many have described as healthy for the growth of the industry.

A lot of times Nigerians don’t see what the Europeans see and this is very bad says Adekunle who feels the Europeans see ahead of us because they are less bias.

“They see things in proper perspectives and so they take decision. We have a lot that they don’t have as we have the people and the market. As we speak, Nigeria is one of the largest markets in the world. Imagine as they are coming in now by the time the disposable incomes of Nigerians improve you will see a boom in the market. The truth is, it is not only in the betting industry that foreign companies are coming in but in other areas like merchandising and banking and it is a welcome development”

He added that the invasion by the foreign companies would instead of stifling the local operators even engender competitiveness and competence in the best interest of the betting industry.

“Competition whichever way it comes is always what it is. So regardless of who you are competing with maybe a local company like yourself or a foreign company, it depends on what you do and how you take care of yourself against competition. Once the lottery agency or department or the regulator are there to put everyone in check, I think the sky is big enough for the birds to actually fly at the same time, he asserted”

At the last count there are more than ten foreign sport betting companies operating in the country. They include Betway, Betking, BetFair, Bet365,22Bet and a couple of others which are offering mouth watery offer claims to punters and players in competition with some leading local operators including Bet9ja, NairaBet, MerryBet, FirstBet and 1960Bet.

Most of these companies offer a wide selection of great offers that include live streaming, live betting and cash out functions as well as promotions that make them attractive to most players of sport bets especially football bets

Boosting confidence in the regulator

As far as sports betting is concerned, the National Lottery Regulatory Commission, NLRC is the agency of government responsible for regulating the industry in the country but this is not without recourse to individual states where such operators ply their trade.

In Lagos for instance, the Lagos State Lottery Board (LSLB) is involved in the monitoring and control of lottery activities in the state as operators are expected to get permits and acquire licenses before they commence business in the state.

But this hasn’t gone down well with some operators who considered it a duplication of fees having obtained a license and permits already from the NLRC and as such do not see the rationality in paying another fee.   

Irked by such effrontery, LSLB last year had to blacklist some of these operators referring to them as illegal operators in the state while discouraging Lagosians from doing business with them. But the NLRC would have none of that as it claimed the national licenses and permits held by these operators remain valid and can be used anywhere in the country.

This development, some stakeholders feel may not be in the best interest of the industry as both parties as regulators need to harmonise responsibilities for better value delivery to the gaming companies and of course the entire gaming industry.

Instead of such needless show of might, efforts according to these concerned stakeholders must however be made by the regulator to boost confidence in the industry through innovation and certifications in a bid to raise the gaming standards in the country commending the Lagos State Lotteries Board (LSLB) for the International Standards Organisation (ISO) 27001 and 9001 certifications recently received to strengthen its operational capability.

The certification which was issued by PECB, an ISO/IEC 17024 accredited certification body that provides education and certification against internationally recognised standards as established by ISO is to ensure improved regulations in the gaming sector in the state in line with world best practices.

Besides, the board as the sole partner in West Africa for iGaming International, is also providing capacity development for its operators and other stakeholders in the gaming industry through iGaming Academy platform as well as offering online applications for operators and other stakeholders as part of strategies to ensure checks and balances, as well as improve its operational standards and procedures.

You may also like

Leave a Comment